PHE5HEF - Examining the Economics of Health Insurance Demand & Funding

This essay examines the increasing demand for health insurance, particularly focusing on the influence of rising medical costs and the challenges posed by pre-existing conditions. It contrasts public and private health insurance models, highlighting the cost-effectiveness and broader accessibility of publicly funded systems. Publicly funded health insurance enables bulk drug purchases, controls service costs, and eliminates pre-payments, offering comprehensive care funded through taxes. The essay also touches on the importance of preventative care over emergency room visits, advocating for early detection and management of illnesses to reduce overall healthcare expenses. Ultimately, the analysis concludes that publicly funded health insurance provides affordable and essential medical care to a wider range of citizens.

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Running head: HEALTH AND ECONOMICS
Name
Institution
Health and Economics

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Health and Economics
Health and Economics
Health insurance in the past was not a necessity for everyone especially to the lower and
middle-class citizens. Recently, there has been an increase in the number of people purchasing
health insurance . Some reasons have influenced this. One of the critical goals has been the cost
of medical care. Medical care has been expensive especially when having pre-existing diseases
and having fatal diseases like cancer. Being able to attend to these sicknesses without insurance
can be quite costly and can even drive a person or family to bankruptcy (Chae, 2018).
Health insurance can be either public or private. It can be funded publicly or privately.
Many countries though have opted to use publicly funded health insurance rather than privately
funded health insurance. This is because the latter is always more expensive compared to the
publicly funded health insurance (US health insurance premiums have more than doubled since
1996, 2008). This may pose a challenge to the middle class and lower class citizens who may not
earn as much as to pay for the health insurances cover that the privately funded health insurance
offer. With publicly funded health insurance, every citizen is assured of a cover, a package that
most citizens would afford. The ordinary citizen enjoys benefits with the publicly funded health
insurance because there are services that are even offered free.
Another reason why countries are choosing public funded health insurance is that it
enables the purchase of drugs in bulk, which is more cost effective for the government. Instead of
the government (Sook-Jung Hyun, 2015) importing drugs in different shifts for the various
sectors, which is more expensive, the government can do it once using publicly funded health
insurance. Moreover, the governments in these countries can control the payment of services in

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Health and Economics
the hospitals and the amount paid to employees primarily in the health sector. The Ministry of
health sets the prices of drugs and procedures. These prices would be higher if they would be set
by private companies who fund private health insurance.
Public funded health insurance requires no pre-payment or deductibles, which would
raise the fees of accessing medical care or completely be a challenge to many. Many countries
prefer public offered health insurance since the funding is done through taxes. Therefore, the
government will not have to get money from somewhere else to be able to fund medical care for
its citizens (Billauer, 2009). There is also the preventative care versus the Emergency Room
visits that the countries look at. Here, the countries encourage their citizens to go for checkups
that are normally offered freely. These checkups, in turn, reveal any underlying sickness that
would be fatal with growth. Therefore, any illnesses that would have proved to more expensive
to treat and manage are handled at an early stage and is dealt with at an affordable price.
In general, the countries prefer public funded health insurance because all the citizens
will receive the basic requirement of medical care at very affordable prices. The prices of drugs
and other surgeries would also be accessible to all citizens.

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Health and Economics
References
Billauer, B. (2009). The Suitability of Mandated Insurance for Health Coverage: Why Car is Not
Like Care. SSRN Electronic Journal. doi: 10.2139/ssrn.1470852.
Chae, S. (2018). Benefits of Network Health Insurance with Primary Care. SSRN Electronic
Journal. doi: 10.2139/ssrn.3248835
Sook-Jung Hyun. (2015). Factors Associated with enrollment in new private health insurance
and additional private health insurance. Health Service Management Review, 9(4), 21-28.
doi: 10.18014/hsmr.2015.9.4.21
US health insurance premiums have more than doubled since, (2008). Pharmacoeconomics &
Outcomes News, 560(1), 10-10. doi: 10.2165/00151234-200805600-00029.